The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

LIGHTBOURN Trading, while confirming to Tribune Business that it was in negotiations to acquire the former City Markets head office and warehouse complex, yesterday indicated no deal had been sealed, and that it would either be "building or buying" depending on whether or not it successfully closed.

The wholesaler's managing director, John Lightbourn, told Tribune Business: "For some years I had been working on building a new place, and then this place became available. It was empty, so I thought I would better investigate it before I built.

"I have evaluated the building and had the experts go through it. I made an offer, and it's up to the [City Markets staff pension fund] Board to decide if they would like it or not. I still may build a place whether or not it goes through, but I have made an offer and it is pending with the Board."

Mr Lightbourn said that while he did not know how long the process would take, "I'm either building or I'm buying." He declined to reveal just how much he had offered to acquire the buildings.

The City Markets staff pension fund's main asset is the supermarket chain's former warehouse and head office on the East-West Highway, which City principal Mark Finlayson, in his capacity as trustee, is attempting to sell. The pension fund also owns some $3 million worth of furniture, fixtures and equipment at City Markets' Cable Beach store, via a sale and leaseback deal done some years ago under the former BSL Holdings ownership.

Mr Finlayson, in a previous interview with Tribune Business, emphasised that "in no way, shape or form has the pension been in danger" because of the supermarket chain's financial woes.

While acknowledging staff concerns over the security of their retirement 'nest egg', Mr Finlayson told Tribune Business: "In no way, shape or form has the pension been in danger, because the value of the building exceeds what is owed to plan beneficiaries."

Mr Finlayson said the value of the City Markets' staff pension fund's main asset "supersedes" what is owed to plan beneficiaries by some $2 million, and that selling the building would easily cover people's retirement savings.

In an interview with Tribune Business on Monday, Mr Finlayson confirmed to Tribune Business that negotiations had been going on for some time.

"We've been talking for a few months. He made a proposal that was forwarded to the committee," Mr Finlayson told Tribune Business. "Everyone's trying to get the best price they can possibly get."

While he would not go into specifics over the sale negotiations, Tribune Business understands that Lightbourn Trading and the pension fund's oversight committee are still trying to agree a sales price, and that a gape remains between the two sides.

Industry sources had suggested that Lightbourn Trading had been looking for some time to own its own premises, and had at one stage assessed the feasibility of constructing its own purpose-built complex in the JFK Drive and Gladstone Road area.

The former City Markets head office, though, would prove attractive, especially given its warehouse - something vital for all wholesale operators. Acquiring it would mean that Lightbourn Trading does not have to build its own property from scratch, and manage a construction project.

"That would make sense, because they currently rent the location where they are now from the Albury family," one wholesale industry source said of Lightbourn Trading's interest in the City Markets building.

"It would make sense for them to buy their own premises. They have been talking for years about building their own place and warehouse."

A retail source added: "That would be natural for them. They've been talking about doing that for a while."